The Promotion of Venture Capital @ New York Time, Your Buzz is next?
Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. In today's New York Times, there is an interesting article about how VC firms now are promoting themselves as much as their portfolio companies.
Some interesting points in The New York Times article titled, "Venture Capital Firms, Once Discreet, Learn the Promotional Game" include:
- Venture capitalists are hiring full-time public relations experts to tell bloggers and reporters of their investing prowess. They publicize their every doing and thought on Twitter and in blog posts.
- In the last year, several top firms have hired people to handle marketing, branding and public relations full time. Among them: Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners and True Ventures. Many others, like Benchmark Capital, New Enterprise Associates and Greylock Partners, keep public relations firms on retainer.
- A number of V.C. firms ranging from some of the oldest, like Bessemer Venture Partners, to some of the youngest, like Peter Thiel’s Founders Fund, are now seeking full-time marketing experts.
- In the last 10 years, venture firms returned, on average, an abysmal 4.6 percent to investors. Institutional investors are looking to scale back on the asset class and reallocate funds just to top firms, where the competition to raise money and invest in hot technology start-ups is fierce.
- Each year 15 deals account for 97 percent of all venture capital profits.
- Forbes Magazine wrote an article headlined: “Andreessen Horowitz: Venture Capital’s New Bad Boys” the same month that Mr. Andreessen appeared on the cover of Wired magazine with a headline money couldn’t buy: “The Man Who Makes the Future
With an obvious bias to the Your Buzz model of Film Annex Capital Partners, Francesco Rulli Founder of Film Annex states:
"4.6% as a Return On Investment (ROI) is not a sutainable model for the venture capital world. To date, Film Annex has never brought in outside investment as there is danger in shifting the control of the start up into the hands of the Venture Capitalist. With this model, the entrepreneur focuses on short term reward rather than long term profitability. The "Inbound Marketing" strategy of Your Buzz is the strategy that attract motivated partners and angel investors, people that are objectively looking for a functional business that makes money and respects the dynamics between business and entrepreneurship."